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Wells Fargo Brokerage Services on Tuesday reached a $6.5 million settlement with the SEC over charges it sold $104.4 million in complex investments to 10 municipal and non-profit institutional clients in 2007 without explaining their risks.

As part of the settlement, Wells Fargo agreed to pay $16,572 in prejudgment interest and return $65,000 in commissions earned on the deals.

Wells Fargo did not admit to or deny the charges as part of the settlement.

The issues involved a division of Wells Fargo “that was completely revamped after the merger with Wachovia,” said Wells Fargo spokeswoman Elise Wilkinson in an e-mail. “We are pleased to put this matter behind us.”

The SEC also claimed Wells Fargo did not establish procedures to ensure its own employees understood the nature and risks of the investments.

“They basically had no idea what they were selling,” said Elaine C. Greenberg, chief of the SEC's municipal securities and public pensions unit, in an interview. “They really abdicated their responsibility as a broker.”

Former Wells Fargo Vice President Shawn Patrick McMurtry, who left the firm last June, agreed to pay $25,000 and be suspended from investment activity. Ms. Greenberg said the firm's remedial measures were factored into the settlement.

Ms. Greenberg said that a Fair Fund administrator will track the performance of the assets, and “will sort out” who is entitled to restitution.

Four of the clients — the Minnesota Medical Foundation; the Minneapolis Foundation; Robins, Kaplan, Miller & Ciresi Foundation for Children; and the Minnesota Workers' Compensation Reinsurance Association — were awarded a total of $30.1 million in a separate lawsuit filed in Minnesota state court over complex structured investments made through the firm's securities lending program, and on July 18, the state's supreme court denied an appeal by Wells Fargo.